Hedge fund veteran Jim Chanos said Monday that he is betting against a major U.S. casino stock because of its exposure to Macao. Chanos, the founder of Kynikos Associates, said on CNBC's "Halftime Report" that his firm has a short position against Wynn Resorts . The company's operations in Macao are one of several foreign-owned casinos that are viewed to be at risk as the local government undergoes a review of licensing rules for the businesses, which end in less than a year. "For years we've said that people are ignoring the concessions are at risk that expire next year. The law expires June of next year and has to be re-written. … We think that the very lucrative Macao concession is going be at best cut back and at worse be cut back dramatically," Chanos said. The casino stocks have been pummeled in recent days since Macao authorities announced the start of a 45-day consultation period last Tuesday. Shares of Wynn dropped nearly 18% last week. The stock fell about 1.4% on Monday to $81.62 per share amid a broader market sell-off. While some investors and strategists have pointed to Wynn as a value-based reopening play, the stock is actually overpriced, Chanos said. "It's one of the most expensive casino stocks out there," he said, pointing to the market value of its stake in Hong Kong-traded Wynn Macao and more than $5 billion in debt held by the U.S. parent company. "Wynn should be trading in the 40s right now," Chanos added. Chanos is one of Wall Street's most well-known short sellers. He made a big bet against Enron two decades ago, and also shorted Chinese coffee chain Luckin in 2020 . Wall Street as a whole appears to be pretty cautious Wynn's stock. According to FactSet, 50% of Wall Street analysts have a neutral rating on Wynn, compared with buy or overweight ratings from 43% of analysts. On Thursday, JPMorgan downgraded Wynn and several other casino stocks because of the uncertainty around future rules and regulations in Macao.
Scott Mlyn | CNBC
Hedge fund veteran Jim Chanos said Monday that he is betting against a major U.S. casino stock because of its exposure to Macao.